Yum China Intrinsic Value – Yum China sees decrease in stake as Dynamic Advisor Solutions LLC lowers investment during fourth quarter
March 28, 2024
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However, Yum China ($NYSE:YUMC)’s stock saw a decrease in its stake during the fourth quarter as Dynamic Advisor Solutions LLC, a wealth management firm, lowered its investment in the company by 11.1%. This news may come as a surprise to some investors, as Dynamic Advisor Solutions LLC had previously been increasing its holdings in Yum China over the past few quarters. Some speculations suggest that the firm may have found better investment opportunities elsewhere or simply decided to rebalance their portfolio. The company has been expanding its digital capabilities and investing in new store formats, such as the recently opened KPRO restaurant, to cater to changing consumer preferences.
Additionally, China’s economy is expected to continue growing, providing a favorable market for Yum China’s restaurant business. The company’s solid financial performance and strategic initiatives provide a solid foundation for future growth and success.
Market Price
This news caused YUMC stock to open at $39.2 and close at $39.0 on Wednesday, down by 0.2% from the previous closing price of $39.0. Despite this positive performance, Yum China‘s stock has been relatively flat in recent months, with a slight decrease in value during the fourth quarter. It is unclear at this time why Dynamic Advisor Solutions LLC chose to reduce its stake in the company, as they have not released a statement or provided any further information.
However, the company has been able to adapt and innovate, introducing new digital initiatives and expanding their delivery services to meet changing consumer behaviors. With the decrease in stake by Dynamic Advisor Solutions LLC, it will be interesting to see how Yum China’s stock performs in the coming weeks and months. Investors will be closely watching the company’s performance and any potential updates or announcements from the company or its major stakeholders. Live Quote…
About the Company
Income Snapshot
Below shows the total revenue, net income and net margin for Yum China. More…
| Total Revenues | Net Income | Net Margin |
| 10.98k | 827 | 8.1% |
Cash Flow Snapshot
Below shows the cash from operations, investing and financing for Yum China. More…
| Operations | Investing | Financing |
| 1.47k | -743 | -716 |
Balance Sheet Snapshot
Below shows the total assets, liabilities and book value per share for Yum China. More…
| Total Assets | Total Liabilities | Book Value Per Share |
| 12.03k | 4.91k | 15.73 |
Key Ratios Snapshot
Some of the financial key ratios for Yum China are shown below. More…
| 3Y Rev Growth | 3Y Operating Profit Growth | Operating Margin |
| 9.9% | 15.8% | 10.3% |
| FCF Margin | ROE | ROA |
| 7.0% | 10.9% | 5.9% |
Analysis – Yum China Intrinsic Value
After conducting a thorough analysis of YUM CHINA‘s fundamentals, I can confidently say that the stock is currently undervalued. Our proprietary Valuation Line has calculated the fair value of YUM CHINA share to be around $61.2. However, as of now, the stock is trading at only $39.0, which means it is undervalued by a significant 36.2%. This undervaluation presents a great investment opportunity for investors, as it means that purchasing YUM CHINA shares at its current price could potentially lead to significant gains in the future. Our analysis indicates that the company has strong fundamentals and is likely to see growth in the future, making it a promising investment option. Some key factors contributing to this undervaluation include YUM CHINA’s strong financial performance and robust growth potential. The company has a solid track record of delivering strong earnings and revenue growth, and its expansion into new markets such as China and international markets provides ample opportunity for further growth. Furthermore, YUM CHINA’s brand recognition and market dominance in the fast-food industry also make it a desirable investment. The company owns popular brands such as KFC, Pizza Hut, and Taco Bell, which have a strong presence in the global market. This not only provides stability but also opens up potential for further expansion and profitability. In conclusion, based on our analysis, YUM CHINA’s stock is currently undervalued and presents a great investment opportunity for those looking to capitalize on its potential for growth and profitability in the long term. With its strong fundamentals and market dominance, we believe that this undervaluation will not last for long, making it an ideal time to invest in YUM CHINA shares. More…
Peers
The restaurant industry is highly competitive, with Yum China Holdings Inc facing off against Xiabuxiabu Catering Management (China) Hldgs Co Ltd, Yum Brands Inc, and Longhui International Holdings Ltd. All four companies are vying for a share of the Chinese market, which is expected to grow to $1.6 trillion by 2020. While Yum China has the advantage of being the first mover in the Chinese market, it will need to continue to innovate and evolve its offerings to stay ahead of its competitors.
– Xiabuxiabu Catering Management (China) Hldgs Co Ltd ($SEHK:00520)
Xiabuxiabu Catering Management (China) Hldgs Co Ltd is a leading Chinese catering company. It has a market cap of 5.06B and a ROE of -13.09%. The company operates a chain of restaurants across China, providing catering services for both individual customers and corporate clients. It also has a strong presence in the online food delivery market, with its own delivery platform and app.
– Yum Brands Inc ($NYSE:YUM)
Yum Brands Inc, a food and beverage company, has a market capitalization of $31.2 billion as of 2022. The company has a return on equity of -15.87%. Yum Brands operates in the quick service restaurant industry. The company franchises and operates restaurants under the KFC, Pizza Hut, and Taco Bell brands. Yum Brands was founded in 1997 and is headquartered in Louisville, Kentucky.
– Longhui International Holdings Ltd ($SEHK:01007)
Longhui International Holdings Ltd is a holding company that, through its subsidiaries, engages in the property development, investment, and management businesses in Mainland China. As of 2022, its market cap was $85.36 million and its ROE was 13.26%. The company is based in Shenzhen, China.
Summary
Dynamic Advisor Solutions LLC decreased their ownership in Yum China Holdings, Inc. by 11.1% in the fourth quarter. This suggests that the investment firm may have lost confidence in the company’s future performance. It is important to closely monitor changes in ownership and analyze the reasons behind them when making investment decisions.
Additionally, Yum China’s stock price may be impacted by this decrease in ownership, making it a potential buying opportunity for other investors. Thoroughly researching a company’s financials and market trends can help make informed investment decisions and mitigate potential risks.
